Out with the Old- ‘just-in-time’ is a thing of the past in today’s inventory management
by Haylle Sok
The supply chain has been given a new blend of market disruptions in the past year. Beyond the obvious pandemic, digital commerce surges and new expectations for next-day delivery have some inventory managers scrambling to keep up with demand while meeting expectations in performance and operations. Inevitably, cost management goes hand in hand with achieving competitive consumer satisfaction results, so this adds another layer of stress for the team to maintain. Of course, none of this matters if the product is unavailable, and if the status of goods is unknown for extended periods of time, the lack of visibility alone can quickly diminish any chance of maintaining a competitive edge.
So, what does it take, then? Tom Martucci, chief technology officer at Consolidated Chassis Management, shares that previously held ideals toward inventory management have shifted. “Inventory management, which was primarily driven by just-in-time philosophies before COVID, has evolved,” Martucci said. “The realization of disruption and the need for ‘buffer stock’ is no longer seen as a luxury but a necessity, particularly in asset management. The operational degradation, lost sales and recovery costs have proven far more impacting than any savings from keeping stocks ‘tight.’ Most companies will now reconsider these old philosophies, with more consideration given to service continuity.”
So, what can be done to better understand what is needed for that competitive advantage everyone in the industry is aiming to achieve? It starts with appropriate asset management. Martucci shares that assets–primarily their utilization and costs–need to be approached with a different philosophy in mind.
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